Location: Middlesex-Somerset-Hunterdon, NJ | Metro: Middlesex-Somerset-Hunterdon, NJ HUD Metro FMR Area
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,790 |
| 1 Bedroom | $1,930 |
| 2 Bedrooms | $2,410 |
| 3 Bedrooms | $2,870 |
| 4 Bedrooms | $3,220 |
| 5 Bedrooms | $3,735 |
| 6 Bedrooms | $4,183 |
| 7 Bedrooms | $4,518 |
| 8 Bedrooms | $4,744 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $2,870 | $586,351 | 0.49% | F |
| 4BR | $3,220 | $720,842 | 0.45% | F |
U.S. Census Bureau data (2024)
A skeptical investor might question whether the Fair Market Rent (FMR) of $2400 for ZIP code 08850 can sufficiently cover the mortgage on a property valued at $610,684. This concern stems from the fact that mortgage payments can vary widely depending on interest rates, loan terms, and down payment sizes. However, using an average fixed-rate mortgage scenario with a 20% down payment and a 30-year term at a current average rate of around 5%, the monthly principal and interest payment would be approximately $2700. Given the FMR, landlords would need to ensure that they can charge close to the maximum allowable rent to cover these costs.
The investor might also doubt if the rental demand in ZIP 08850 is strong enough at 15.3% of the population being renters. This percentage suggests that the area has a relatively low proportion of renters compared to homeowners. Yet, it's important to consider that even a modest rental market can support investment properties if managed well. The key is understanding the local rental trends and ensuring the property is competitively priced. Additionally, the presence of institutions or employers that attract transient populations can bolster demand.
A further objection could be whether Housing Choice Vouchers will keep up with the market rent of $1,218. The voucher amount is crucial for those relying on government assistance to pay rent. If the voucher does not match the market rent, it could limit the pool of potential tenants. Current data indicates that the voucher program in the region aims to provide subsidies that are in line with market conditions, but the exact amount can fluctuate based on funding levels and local policies. Investors should monitor these changes closely and perhaps diversify their tenant base to include both voucher recipients and private renters.
In summary, while the data raises valid points for consideration, it also provides a basis for informed decision-making. The FMR needs to be leveraged effectively to cover mortgage costs, the rental demand, though not high, is still present, and the voucher program should be watched for any adjustments that impact rental affordability. These factors combined offer a balanced view of the investment landscape in ZIP 08850.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). Demographics from U.S. Census (2024).
About FMR: Fair Market Rent (FMR) is used to determine payment standards for the Section 8 Housing Choice Voucher program, initial renewal rents for some expiring project-based Section 8 contracts, and rent ceilings for HOME Investment Partnerships.